Seoul: Samsung Electronics Co. recalled its Galaxy Note 7 smartphones because of a faulty battery and announced a global replacement program just days before archrival Apple Inc. is set to unveil its newest iPhones.
Sales will be halted in 10 countries where the large-screen device has been released, Koh Dong Jin, head of Samsung’s mobile division, said Friday. He also apologized for the battery problem, which has been linked to explosions of the phone when charging.
The recall is a blow to Samsung’s reputation and robs the company of momentum it had built in smartphones by capitalizing on a lull in demand for Apple devices between new iPhone models. Demand for the iris-reading Note 7, which debuted to glowing reviews, and the release of the company’s biggest profit in two years had driven its share price to a record as analysts raised their price targets.
“The unexpected recall would surely irritate buyers and the latest incident looks worrisome,” said Lee Seung Woo, an analyst at IBK Securities Co. in Seoul.
Lee expects shipments of the Note 7 this year will shrink to 12 million units from a previous estimate of 14 million units. He estimates the total number of handsets affected by the battery problem to be about 1 million, with about 600,000 units sold overseas.
As of 1 September, there had been 35 cases reported globally on the battery cell issue, the company said in a separate statement.
The latest move came only few days after Samsung delayed supply to carriers, citing a need for more testing. Media reports in South Korea have shown users with Note 7s they said had caught fire while charging.
Shares of Samsung rose 0.6% to 1,597,000 won on Friday before the recall was announced. Samsung SDI Co., its battery affiliate, closed unchanged.
Apple has invited journalists to an event in San Francisco on 7 September where the world’s most valuable public company is expected to introduce next-generation versions of the iPhone and Apple Watch. Bloomberg